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Bloomberg
Centrica Plc plunged to the lowest in almost two decades after tougher trading conditions in the UK energy market prompted the utility to forecast a gloomy outlook for next year.
Hurt both by a government-imposed cap on consumer energy bills and by outages at nuclear plants and gas wells, a target range for average adjusted operating cash flow “is under some pressure,†the company said. Britain’s biggest household energy supplier plans asset sales and cost cuts totalling 750 million pounds ($981 million) as well as 1,500 to 2,000 job reductions this year.
The outlook prompted Goldman Sachs to warn that future earnings estimates will likely be pared for this year, fanning speculation that Centrica will have to cut its dividend. It’s the latest sign of pressure for the “Big Six†utilities in the UK, with competition between retail suppliers heating up and both main political parties working to limit what energy companies can earn.